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News-Sentinel.com Your Town. Your Voice.

The pressure is on from both sides in the tug-of-war for Lutheran Health

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press
Saturday, May 20, 2017 12:01 am

 In the end, the proposed sale of Lutheran Health Network to a group headed by local physicians will come down to money. But for now, an unusual amount of gamesmanship is taking center stage — and both sides are playing their hands well.

I've been a journalist in this town for 38 years and I can't recall a press conference quite like the one John Crawford organized on short notice for Friday morning, at which he and other City Council members enthusiastically injected themselves into what would normally be a private negotiation and decision. True, Crawford is also a physician and Michael Barranda, also R-at large, is a member of the St. Joseph Hospital Board of Directors, which Thursday joined Lutheran doctors in unanimously expressing a lack of confidence in Lutheran Health's Tennessee-based parent company. And 30,000 Allen County residents work in the health-care industry. Even so, Crawford admitted council's attempt to influence an outcome in which it has no direct standing is a little "weird."

Still, he was not coy about his motive.

"I hope it creates pressure on the (Community Health Services) board to realize the community, St. Joseph Board and all Lutheran employees support a sale," he said. Employees planned to increase that pressure Saturday by rallying in support of a sale in the hospital parking lot.

But the pressure is being applied from both sides, Crawford said.

"That $500 million offer made my political hairs stand on end," he said, referring to CHS's announcement, made just days before Lutheran physicians were scheduled to make their buy-out bid, to invest heavily in the Lutheran Health Network. Crawford and other doctors have suggested CHS has not adequately invested in the network even though it produced a $300 million profit last year. "(CHS) knew of the meeting, then suddenly there's this press release. If you believe that, you must believe in some alternate universe."

If the offer was an attempt to satisfy doctors and others who, like Crawford, believe CHS is subsidizing the rest of its assets by transferring money out of Fort Wayne, it seems to have failed. As the poster for that Saturday rally made clear, that $500 million is too little, too late, because "trust is earned, not purchased." Nevertheless, it's an offer CHS could deliver despite its $1.7 billion loss in 2016.

But with hundreds of millions of dollars at stake, and perhaps more, how could any amount of public pressure convince CHS  to sell perhaps its most valuable asset?

For one thing, he said, doctors and other employees could make their displeasure known in a variety of ways, creating a "prickly problem" for CHS should it balk at a sale. Perhaps more important, doctors could exert pressure by choosing to take their services elsewhere — even though that might affect their own bottom line because doctors own about 20 percent of Lutheran Health Network. But that ownership also gives them more clout than they would otherwise have, he suggested.

It's hard to predict how this story will end. If CHS were a baseball team trying to improve, the sale might make sense in the same way bad teams improve by trading their best players, not their worst. But CHS is a corporation, not a franchise. Despite its need for cash, is it willing to part with its "most valuable player" if that will only make overall operations even less profitable moving forward?

Doctors and employees alike insist they will do nothing to jeopardize patient care. But what if they could maintain care while creating enough resistance to make a sale seem more attractive? What if CHS could still somehow invest enough money and rebuild enough trust to avoid a messy "divorce"?

The mutual pressure is on, and all else being equal could help determine the outcome in this high-stakes game of chicken.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com or call him at 461-8355.

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